Chronicles Of Depression 2.0: #456: China 4

China will not save Western banksThe chairman of China’s largest sovereign wealth fund has said he “does not have the courage” to plough money into Wall Street and the City.

Lou Jiwei, the chairman and chief executive of the China Investment Corporation, a $200bn (£135bn) fund, said China had no intention of “saving” the West from the financial crisis.

“Right now we do not have the courage to invest in financial institutions because we do not know what problems they may have,” said Mr Lou, at the Clinton Global Initiative conference in Hong Kong.

China’s disastrous investments in Blackstone, the private equity fund, Morgan Stanley, the investment bank, and Barclays Bank appear to have dulled the appetite for further gambles.

Mr Lou sank $3bn into Blackstone at $29.605 a share in June 2007. The share price of the fund closed yesterday at $6.04, resulting in a near 80pc loss of $2.4bn.

Emphasis added by me.

And so China gets a mauling by the rigged markets!

And foolishly thinks:

He added that the panicky pace of rule changes by Western regulators also gave him cause for concern. “The policies of the developed nations on these financial institutions are not clear. Until they are clear, I don’t dare to invest in them. What if they go bust? I will lose everything,” he said.

Emphasis added by me.

Here’s a Bulletin: You are going to lose everything anyway!

This is the ostrich head in hole strategy:

Mr Lou also repeated the Communist Party line that China will concentrate on getting its own house in order. “China can only save herself because the scale of China is still rather small,” he said, adding that China’s economy is not yet strong enough to have a significant effect on the global economy. “If China can do a good job domestically, that is the best thing it can do for the world,” he said.

Emphasis added by me.

No. Because China is all about exports.

Have some consultants from the woebegone Japan, Inc. tutor you in the hazards of that practice.

China: Too big to ignore the world. And also too small to go it alone.